In this article:
It's important to keep your checking account healthy and have personal savings goals, but what if you have a spouse, child or other loved one you want to combine efforts with or monitor?
You can add someone to your existing personal checking or savings account quite easily, transforming it into a joint account where you both have equal access. But just because you can doesn't mean you should, so here are some important points to consider before adding someone to your bank account.
Can I Add Someone to My Bank Account?
Yes, you can add another person to your existing savings account or checking account. It's a simple and common process, which turns an individual savings or checking account into a joint one.
Before you do this, though, consider how it'll work and what rules you'll both live by. For example, how will you two communicate about spending and ensure neither triggers an overdraft? Are there expectations about contributions or spending limits? What purchases or actions require checking in with the other partner?
It can be beneficial to keep a separate savings account or checking account that nobody else can access for a variety of reasons. So rather than adding someone to your account, it may be better to leave yours alone and open a new joint account for shared expenses and goals.
Another alternative is to maintain separate accounts and link them. This lets you easily send money to each other without being able to access or spend money from the other account.
Find Digital Checking Accounts
Pros and Cons of Joint Bank Accounts
Sharing a bank account may sound like a simple step, but there are potential upsides and downsides you should familiarize yourself with first.
Pros of Having a Joint Savings or Checking Account
- Working together: Sharing an account allows you and another to pool money and work together on goals, like maintaining a checking account balance or building an emergency fund.
- Simplified budgeting: If you and your partner share a budget, shared checking and savings accounts can make managing finances easier since you'll both have equal account access.
- Supervise loved ones: Say your teen is ready for a savings account for gift money or a checking account for summer paychecks, but you're worried they'll squander it. Or your aging parent is having memory issues and you're worried about their finances. Sharing a checking or savings account lets you keep an eye on the other person's activity and intervene if necessary.
- Meet savings account requirements: High-yield savings accounts offer excellent returns, but some require you keep a minimum balance or face fees. Sharing an account might make it more feasible to meet the requirements and avoid fees, and perhaps score a better interest rate.
- Greater insurance coverage: Money in savings and checking accounts at banks is insured by the Federal Deposit Insurance Corp. (FDIC), but only to an extent. Credit unions offer similar protection. Should your bank or credit union fail, this government insurance reimburses you up to $250,000 per account holder in each ownership category. So if you have multiple individual checking and savings accounts with one bank, only $250,000 is covered regardless of your balances. However, joint accounts are considered a separate ownership category and are insured up to $250,000 per owner—meaning up to $500,000 in coverage. (Another way to protect yourself is to have accounts at multiple banks.)
Cons of Having a Joint Savings or Checking Account
- Relinquishing control: You can both deposit and withdraw funds without the other's permission. That's fine if you trust your joint account holder, but if they're an overspender, a gambler or have financial issues, think carefully before giving access to your money without limits.
- Requires communication: Even if your partner is financially savvy, failing to discuss expectations can lead to frustration and unintended consequences. One person might exceed the monthly withdrawal limit on a savings account, or overspend on the checking account and cause an overdraft. It's crucial to communicate regularly to avoid issues.
- Less privacy: A joint account allows you to see each other's deposits, withdrawals and spending. This may be acceptable if you both prefer transparency, but it could be uncomfortable if you like privacy with your money.
- More vulnerability to creditors: If someone's unpaid debt has gone into collections, their creditor could gain permission to take money from their deposit accounts as a settlement. The IRS can also seize money in deposit accounts if someone owes back taxes. Should your spouse have debt or tax problems and you share a savings or checking account, your money in the account becomes vulnerable even if you had nothing to do with those issues.
- Impacts ability to get future accounts: While banks don't run credit checks when opening savings or checking accounts, they do run your name through the ChexSystems. This reporting agency shows if you've experienced bankruptcy or have a history of overdrafts, unpaid bank fees, links to fraud or other banking issues. If your banking record is especially problematic, you can be denied a checking or savings account, so be cautious about adding someone to your account who might cause damage and impact your ability to open future accounts.
How to Add Someone to Your Checking or Savings Account
Before adding someone to your individual checking or savings account, don't forget that you can keep your existing accounts separate and open a new joint one together.
The procedure for adding someone to your bank account varies by financial institution. Typically, it includes the following:
- Visit a bank branch together or call together (though some banks or credit unions allow you to do it online).
- Request to add the other person to your savings or checking account.
- The person will provide proof of identification to the bank, along with other basic information like their birth date and Social Security number.
Depending on the bank, you may have the option to create your own online profiles or share one, and customize alerts.
Who Should I Add to My Bank Account?
Joint account holders on checking and savings accounts have equal legal rights to do whatever they wish with the money—even if the money came from your paycheck or you don't want them to spend it.
That's a lot of power, so only add someone if you trust them implicitly and you would benefit. You may have some recourse if you believe the person acts criminally, like transferring all of the money into a private account without permission, but it's best not to count on it.
In general, it's safest to only add:
- Your spouse, especially if you share many expenses
- Your child, if you want to monitor their usage (though if you want to be able to set spending limits or other controls, it's probably better to get a kid-friendly bank account)
- An aging parent who needs help paying bills and/or who is experiencing memory problems and needs someone to monitor their spending
It's not a casual thing to share a financial account. It's a huge responsibility with major repercussions, so it may not be wise to add a friend, roommate or new love interest.
How to Remove Someone From Your Bank Account
Removing someone as a joint account holder is a little trickier, and requirements vary by state law and bank. You usually can't remove someone from a joint checking or savings account unless that person provides their permission, even if you're getting divorced. This might require visiting a branch or calling the bank together and signing paperwork. However, some states or banks allow just one person to close an account, so review your account agreement or contact your bank about requirements.
The situation is different if the person passed away, though it also depends on your state's laws and account terms. If the account agreement had something called "right of survivorship," the account's funds go to the surviving owner (you). If it doesn't, the legally deemed share of that person's account has to go through their estate. Again, contact your bank for details on requirements.
The Bottom Line
Adding someone to your bank account could be the best choice for you, and it's a simple process. But given the potential risks—and the difficulty of removing someone—it could be safest to keep your accounts as-is and open a new savings account or new checking account together.